A small team, a free-to-play model, and a kid-friendly horror twist—Animal Company is shaking up the VR gaming market. Here’s why it matters.

The most profitable VR game of the last year had to be the breakout hit, Gorilla Tag, which generated over $100 million in revenue since launching in 2021 and amassed more than 3 million monthly users according to sources. It was built be a team of three people. A company of animals is about to change that.

Now there’s a new game threatening to dethrone King Kong. Animal Company just came out of stealth mode. It was formed by a small team from Spatial.io, a platform that’s pivoted from virtual collaboration to user generated content creation. They raised about $35 million back in the day before the collapse of the metaverse, and have milked it long enough to have found success. 

Animal Company is a cross between Gorilla Tag and a game called Lethal Company, a cooperative horror game where players take on the role of employees scavenging abandoned industrial sites for valuable scrap while avoiding terrifying entities. The developers basically took the arm swinging locomotion machanic that made Gorilla Tag so popular, and then make it into a spooky, kid friendly horror game with monsters. 

Animal Company is now the top-selling game by revenue and in the top 3 OVERALL MOST popular games, just behind Meta Horizon Worlds and Gorilla Tag, based on the Quest Store rankings. Their Discord has doubled in a month to 130k members. 

Animal Company points to some important trends in the VR market. 

1. Smaller Wins: You don’t need a big team to make money. In fact, it works against you. Beat Saber was tiny team. Gorilla Tag and Animal Company too. I don’t know exactly how big the Spatial team was the built it, but from their online posting I’d guessing it was about 6 people. 
2. Graphics. Don’t. Matter. Big studios have been spending tens of millions trying to create realistic environments because that’s what they think defines immersion. It’s not. 
3. VR is Social: Everybody was too busy saying “VR is Antisocial” to realize that VR can be incredibly social. And that’s what kids want. They never developed the desire to socialize in person (thanks COVID.) So VR gives them the ability to come together and play with friends. Gorilla Tag and Animal Company are the new playgrounds. Get used to it. 
4. Kids Rule: Generation Alpha are the first virtual natives. And they’re the ones who will drive the consumer adoption of VR. In fact they already are. Which is good news if you’re developing for that market now. And bad news if you’re developing for anyone older than 13, because you’re gonna be waiting awhile for these kids to grow up. 
5. Free Is the Best Price: I spoke to the head of a major VR game studio this week, and he said free-to-play games are the only thing working on the Quest store. Kids don’t have a big budget so when they look at the store, they are attracted to games that are free. Then once they’re hooked they hit up mom and dad for money to customize their avatars. Parents are happy to comply because their kids are playing, actively swinging their arms, getting exercise and having fun. 
6. Marketing is social media: App discover on the Quest store is shit. But now that the Horizon feed is front and center, people posting becomes the new app discovery. 

VR adoption is happening slower than anyone in the VR industry expected. The narrative that people don’t want to put computers on their faces is proving out for most generations. But the youngest of them are all in. Which is ironic because people kept saying that nobody under 13 years of age should do VR. 

Smartphones started as a business tool because we needed the internet away from our desks. Eventually, our kids grabbed onto them, and now we have 3-year-olds with iPads. It may happen the other way around with VR. But for now, VR is for the kids.